To hear Steve Weisman tell it, credit repair is part police work and part legal expertise.

"Legitimate credit repair companies," Weisman says, "are knowledgeable about finding mistakes in credit reports and knowing how to provide evidence sufficient to persuade the credit reporting agencies to remove such false information."

Though it may not qualify as an episode of NCIS, Weisman, who is a notable lawyer, college professor, and one of the country's leading experts on cybersecurity, identity theft, and scams, paints a picture of a process not unlike a criminal investigation. In this case, the "crime" involves false information that damages you and your credit.

Weisman, author of agreed to an exclusive interview with Investopedia on the subject of credit repair, including how to find and hire the right credit repair agency or even whether to attempt to repair your credit on your own.

Defining Credit Repair

Investopedia: Let's start with the basics. What, exactly, is credit repair?

Weisman: Credit repair is the process by which incorrect negative information on your credit report is removed from your credit report, which will result in your credit score going up. A poor credit score can affect your ability to get a loan, rent an apartment, get a job, purchase insurance, and more.

It is important to emphasize that no credit repair agency can legally remove accurate negative information from your credit report, although there are a number of companies that attempt to do that. By law, negative information stays on your credit report for seven years and bankruptcies for 10 years.

Investopedia: Is this something only credit repair companies can do or can people repair their credit by removing incorrect information themselves?

Weisman: Credit repair companies help people get inaccurate information removed from their credit reports. They have no more power or authority to do that than individual people do, but some people prefer to have credit repair companies do the work for them.

Initiating Credit Repair

Investopedia: How does the credit repair process start? How do you know you may even be a candidate for credit repair?

Weisman: If you get your credit score and it is not particularly good, you can hire a credit repair company to go through your credit report to determine what was the cause for the low score.

Credit Repair vs. Credit Counseling

Investopedia: We often see ads on TV for credit counseling. Is that the same as credit repair or different?

Weisman: Different. Credit counseling agencies attempt to negotiate plans with your creditors to accept reduced payments. Some of these companies are partially funded by the credit card companies themselves, who see this as a win-win situation for their customers and themselves.

However, these credit counseling agencies are not credit repair companies. Credit repair companies work for their individual clients, who hire them to correct their credit reports and thereby enhance their credit scores.

Investopedia: So, do credit repair companies ever offer credit counseling or vice versa?

Weisman: Credit repair companies do not generally provide credit counseling and vice versa. They each perform separate services.

The Effectiveness of Credit Repair

Investopedia: Does credit repair really work? In other words, are credit repair companies effective at what they do?

Weisman: Legitimate credit repair companies can do a good job of working with the major credit reporting agencies, Equifax, Experian, and TransUnion, to remove false negative information from your credit report and consequently increase your credit score.

Many credit reports have mistaken information that can reduce your credit score. Among the mistaken information that commonly appears on credit reports are accounts that are behind in payment that do not belong to you, bankruptcies of other people with similar names, misspellings of names that result in someone else's negative information appearing on your report, negative information that is more than seven years old, and debts that cannot be validated and verified.

Investopedia: Do credit repair companies only work with credit reporting agencies or do they sometimes work with creditors or others in the chain?

Weisman: While generally credit repair companies primarily work with credit reporting agencies, they also may work directly with creditors in order to have the creditors change what they report to the credit reporting bureaus. Credit repair companies may work extensively with creditors in order to induce them into correcting inaccurate information reported to the credit reporting bureaus or to negotiate a settlement with the creditor by which the creditor reports to the credit reporting bureaus that particular debts have been paid satisfactorily.

Credit Repair Timeline and Cost

Investopedia: After the process of credit repair starts, how long does it generally take?

Weisman: How long credit repair takes depends on how much needs to be corrected and how promptly the credit reporting agencies respond to requests to correct the reports.

The law requires credit reporting agencies to investigate claims of mistakes and respond within 30 days of receiving notice by someone trying to fix their credit report; however, sometimes this time period can be extended if the credit reporting agencies require more information or documentation to complete their investigation. It is not unusual for credit repair to take many months to be completed.

Investopedia: What’s the cost of using a credit repair company?

Weisman: Legitimate credit repair companies will typically charge monthly fees of between $79 and $129, and some charge a setup fee.

Evaluation and Regulation Credit Repair Companies

Investopedia: Who regulates credit repair companies and how does a consumer know if a particular credit repair company is legit?

Weisman: The Federal Trade Commission (FTC) regulates credit repair companies and is the place consumers should go if they have a problem with a credit repair company. In order to determine if a credit repair company is legitimate, you should check with the FTC to see if any complaints or legal actions have been made against them.

Investopedia: What about legislation or laws that protect people from scam credit repair companies?

Weisman: The Credit Repair Organizations Act (CROA) requires credit repair companies to provide you with a written contract that details the services they will perform for you and explain your rights under the law, notify you of a three-day right to cancel your contract with the credit repair company, inform you of how long it will take to perform their services, and explain in detail the total cost to you.

Most importantly, they cannot charge you before they have completed their services. This is the biggest indication of a scam credit repair company. The scammers generally charge large upfront fees before they perform any services.

Investopedia: Is there anything else about the CROA guidelines people should know?

Weisman: The CROA also provides you with the right to sue in federal court a credit repair company that violates the law and obtain not just compensatory damages (money to compensate you for your losses), but also punitive damages (money to punish and deter the scammers from harming other people).

The End of the Process

Investopedia: How can you tell that your credit has been repaired?

Weisman: You can determine if your credit has been repaired by checking your credit reports and credit scores with each of the three major credit reporting agencies; however, you should regularly follow up checking your credit report and credit scores because sometimes inaccurate information that harms your credit score is removed after being disputed, but reappears on your credit report, thereby lowering your score later.

Alternatives to Hiring a Credit Repair Company

Investopedia: Are there alternatives to using a credit repair company?

Weisman: The alternative to using a credit repair company is to do it yourself. Again, it is important to note that a credit repair service cannot do anything that you cannot do for yourself.

Some people, however, prefer to have the work done for them rather than do it themselves, particularly if they are unfamiliar with the process.

Common Misunderstandings About Credit Repair

Investopedia: What do you think are some common misunderstandings people have about credit repair?

Weisman: I believe that the most misunderstood aspect of the credit repair industry is (the belief) that true negative information can be legitimately removed from your report.

People also believe credit repair companies have more power to take actions to remove negative information from credit reports than individual consumers do. Finally, I don't think people appreciate how much mistaken information commonly appears on credit reports.

Investopedia: Given all that, are there things credit repair companies do noticeably better than their clients can do on their own?

Weisman: Yes. Legitimate credit repair companies are knowledgeable about finding mistakes in credit reports and knowing how to provide evidence sufficient to persuade the credit reporting agencies to remove such false information.

Final Thoughts

Investopedia: What should people know about credit repair that we didn't ask?

Weisman: Credit repair is a process that should continue. Even after your credit report has been corrected and your score increased, you should regularly review your credit reports at each of the three credit reporting agencies and check your credit scores regularly so that if a problem arises, you can deal with it in a timely fashion, rather than having to deal with it in an emergency, such as: You have applied for a loan and just learned that your credit score is low.